Supply chain decision-making of green products considering a retailer's fairness concerns under a pre-sale model

Advancing the upgrade and promotion of green products can facilitate green supply chain transformations. Currently, manufacturers cooperate with retailers stationed on e-commerce platforms to promote green products through a pre-sale model. Thus, we propose a green product supply chain comprising one dominant manufacturer and one retailer, where the manufacturer can invest to improve a product's green level, and the retailer can make regular-sale promotional efforts. Combining the pre-sale model and fairness concerns of the retailer, three models using the Stackelberg game were demonstrated to analyze the impact of the pre-sale scale and the retailer's fairness concerns on the supply chain members' optimal decisions. The results indicate that an improvement in consumers' green sensitivity can lead to a reduction in promotional efforts and is not conducive to upgrading under the fairness concerns of the retailer. Additionally, increasing the pre-sale scale does not continuously alleviate the uneven profit distribution. Therefore, we propose a cost-sharing contract to achieve the goal of coordination and find that adopting the contract weakens the negative effects of fairness concerns. Interestingly, the influence of adopting a cost-sharing contract is more significant when the pre-sale scale is large, and it improves the profits of retailers more than those of manufacturers. A larger cost-sharing coefficient aggravates the negative effect of fairness concerns on the entire chain's profits. When members set a sensible costsharing coefficient, the contract is beneficial for all members of the entire chain and green supply chain transformation.

Automated summary

Advancing the upgrade and promotion of green products can facilitate green supply chain transformations. The study proposes a green product supply chain model with a dominant manufacturer and a retailer, where the manufacturer invests in improving a product's green level and the retailer conducts regular sales promotion. The impact of pre-sale scale and retailer's fairness concerns on optimal decisions of supply chain members are analyzed using the Stackelberg game model.